Coworkers of FTX Founder Bankman-Fried Confess to Fraud

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According to US authorities, two of Sam Bankman’s coworkers at FTX, Fried’s, pled guilty to fraud-related crimes in connection with the cryptocurrency exchange’s demise.These accusations were tied to the collapse of FTX.

Gary Wang, one of the co-founders of FTX, and Caroline Ellison, a former CEO of Alameda Research, have both admitted to the charges against them and agreed to help authorities with their ongoing investigations, according to a statement released late Wednesday night by Damian Williams, the United States Attorney for the Southern District of New York.

Williams did not reveal the specific counts that Wang and Ellison pleaded guilty to, but he did say that the statement will not be the last relating to his office’s investigation into FTX.

“Permit me to repeat a call I made the previous week. If you engaged in inappropriate behavior while working at FTX or Alameda, now is the time to make amends for your actions. Williams said that while we are going swiftly, our patience will not last forever.

He continued by saying, “We continue to work around the clock, and we are far from finished.”

According to two separate statements made on Wednesday, the United States Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), respectively, have filed civil charges against Ellison and Wang.

Gary Gensler, the head of the Securities and Exchange Commission, was quoted as saying, “We allege that Caroline Ellison and Sam Bankman-Fried planned to manipulate the price of FTT, an exchange crypto security token that was important to FTX, as part of their scheme to deceive,” so that they could “keep the value of their house of cards up.”

Furthermore, “we claim that Ms. Ellison and Mr. Wang actively participated in a plan to abuse FTX client funds in order to prop up Alameda and provide collateral for margin trading.”Investors were left holding the bag once Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang’s FTT scheme, along with the rest of the house of cards, was exposed as a fraud. Investors will continue to be exposed to risk as long as cryptocurrency platforms do not comply with tried-and-true regulations governing securities.

The Securities and Exchange Commission (SEC) said that Ellison and Wang were helping it with its continuing investigations.

Chairman Rostin Behnam of the Commodity Futures Trading Commission (CFTC) said that the agency has proceeded “aggressively” to safeguard clients from extra damage and losses and to hold all people who commit fraud responsible.

According to Behnam, Chairman of the Commodity Futures Trading Commission (CFTC), “in the absence of a comprehensive regulatory framework over digital assets, the CFTC will use all of its existing power and authority to protect all market participants while also ensuring the integrity of commodity markets.”

Following his extradition to the United States, where he faces eight accusations, including wire fraud, money laundering, and campaign finance crimes, the news came soon after Bankman-Fried left the Bahamas. Among these allegations are breaches of campaign financing laws.

An attorney for Bankman-Fried refused to comment on the matter.

Bankman-Fried, who was formerly regarded as the second wealthiest millennial in the world behind Mark Zuckerberg, was detained on the Caribbean island a week ago after US officials filed charges over what prosecutors characterized as “one of the largest financial scams in the history of the United States.”

It is claimed that Bankman-Fried stole the deposits of FTX clients in order to support dangerous wagers made by Alameda, an allied trading firm, as well as political contributions. This is only one of the many wrongdoings that are attributed to Bankman-Fried.

The arrest of Bankman-Fried capped a stunning fall from grace for the 30-year-old former “golden boy” of the cryptocurrency sector. Bankman-Fried had courted famous backers, such as Seinfeld creator Larry David and NFL star Tom Brady, and was counted among the most well-connected donors in Washington, DC. His fall from grace culminated with his arrest.

The failure of FTX, a cryptocurrency that was once worth $32 billion, has fueled skepticism about the integrity of cryptocurrencies. This has led to demands for more stringent regulation and raised worries about the viability of virtual assets in general.

 

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